This report summarizes the economic analysis of the U. S. Geological Survey¿s 1998 petroleum assessment of the 1002 area of the Arctic National Wildlife Refuge. Volumes of technically recoverable oil and gas were assessed by geologists. Estimates of technically recoverable oil in undiscovered accumulations in the 1002 area range from 4.25 billions of barrels of oil (BBO) to 11.80 BBO with a mean of 7.69 BBO. The ranges in estimated volumes correspond to the 95 percent probability (that is, a 19 in 20 chance of occurrence) and the 5 percent probability level (1 in 20 chance), respectively. Estimates of technically recoverable non-associated gas in undiscovered gas fields range from 0 to 10.02 trillions of cubic feet of gas (TCFG) with a mean value of 3.48 TCFG. Non-associated gas resources were not examined in the economic analysis because they are not expected to be a target of explorationists for at least two decades.
Characteristics of the assessment important for the economic analysis included the field size distribution, location, and depth. At the mean estimate, 3.26 BBO is in fields of at least 500 million barrels. Accumulation size-frequency distributions associated with the 95th and 5th fractiles indicate 1.12 BBO and 6.43 BBO were assessed in fields of at least 500 million barrels, respectively. Plays of the undeformed area, the western part of the 1002 area, were assessed to contain more than 80 percent of the oil. Just over three-fourths of the assessed oil was assigned to depths of 10,000 feet or less. The economic analysis used the accumulation size-frequency distributions associated with the mean, 95th, and 5th fractile estimates of undiscovered technically recoverable oil. An after-tax 12 percent rate of return or hurdle rate was assumed. All calculations are in constant 1996 dollars.